tag:blogger.com,1999:blog-3584696203336871201.post6998398428891703913..comments2016-07-20T06:26:31.100-07:00Comments on Dividend Growth Investor: Is $1,000,000 enough to retire on? Is $2,000,000 enough money to retire on?Dhttp://www.blogger.com/profile/11197290990687067072noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-3584696203336871201.post-33020137614421670462009-05-29T21:32:54.546-07:002009-05-29T21:32:54.546-07:00I agree with David - 70% rule is way too general. ...I agree with David - 70% rule is way too general. I will also add that retirement calculators are unnecessarily scientific because nearly all approaches agree you can spend roughly 4% of assets safely.(The math is too complicated for a comment but is explained in <A HREF="http://financialmentor.com/educational-products/ebooks/how-much-is-enough-to-retire" REL="nofollow">How Much Money Do I Need For Retirement</A> for those that are interested. Since you can spend 4% of assets merely figure your first year budget and multiply times 25 to estimate required retirement savings (Rule of 25). This must be adjusted for inflation. Additionally, you have a huge advantage being focused on dividend growth investing because that takes care of the rarely discussed problem of increasing longevity. The simplest plan is just to build savings until your dividends exceed your spending (the cash flow retirement plan). Limit your spending increases to your dividend increases and it is pretty hard to go wrong.<br /><br />Hope that helps...Todd R. Tresidderhttp://financialmentor.comnoreply@blogger.comtag:blogger.com,1999:blog-3584696203336871201.post-72745271110480792312009-03-11T19:49:00.000-07:002009-03-11T19:49:00.000-07:00Even if your mortgage is payed off, don't forget a...Even if your mortgage is payed off, don't forget about property taxes and costs of maintaining a home (or in the case of a condo, HOA fees) as well as home owner's insurance.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3584696203336871201.post-71412176189316854732008-08-22T20:52:00.000-07:002008-08-22T20:52:00.000-07:00"I do think however that in the future health cost..."I do think however that in the future health costs increases will not rise more than the rate of inflation, after stricter insurance reimbursement policies require health management organizations to be more selective in their billing to patients and the procedures that are recommended."<BR/><BR/>I found this comment on health care costs to be somewhat vague, and doesn't really make sense to me. Can you expand a bit? <BR/><BR/>Are you thinking that the HMOs are not insurance companies? Who is setting these "stricter policies" and which group is following these policies?... doctors?...hospitals?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3584696203336871201.post-14039187067039500562008-08-21T06:09:00.000-07:002008-08-21T06:09:00.000-07:00Bill and David,Thanks a lot for your input. I am s...Bill and David,<BR/><BR/>Thanks a lot for your input. I am simply trying to view the amount of money soaked for retirement question form several angles. You might enjoy those articles as well:<BR/><BR/>http://dividendgrowth.blogspot.com/2008/08/how-much-money-do-you-really-need-to.html<BR/><BR/>http://dividendgrowth.blogspot.com/2008/07/determining-withdrawal-rates-using.html<BR/><BR/>http://dividendgrowth.blogspot.com/2008/03/case-for-dividend-investing-in.htmlDividend Growth Investorhttp://dividendgrowth.blogspot.com/noreply@blogger.comtag:blogger.com,1999:blog-3584696203336871201.post-87077183001260374572008-08-20T19:41:00.000-07:002008-08-20T19:41:00.000-07:00I AM retired, and I can say this for sure: All est...I AM retired, and I can say this for sure: All estimates of the nest egg needed to retire, that are expressed as a percentage of your final income, are waaaay too general to be of use. You have to plan for your own retirement by building, from scratch, a retirement budget.<BR/><BR/>Some costs go down in retirement: No mortgage (if you've paid off your house), no 401(k) contribution, less spending on clothes, less spending on commuting, etc.<BR/><BR/>Some costs may go up: You may spend more on travel and leisure activities, healthcare costs may go up, and the like.<BR/><BR/>The answer for each individual (or couple) is different. The "70% of final income" type answers are too general. At the end of your worklife, you may not have been spending anywhere near your total income to live...you may have been socking it away (for retirement), or paying down your mortgage or other debt.<BR/><BR/>Create your own budget, based on both your needs and desires for the kind of retirement you want.David Van Knappwww.sensiblestocks.comnoreply@blogger.comtag:blogger.com,1999:blog-3584696203336871201.post-35684507201541060592008-08-20T06:06:00.000-07:002008-08-20T06:06:00.000-07:00I think the "gurus" (cough!) are erring on the sid...I think the "gurus" (cough!) are erring on the side of caution. However, you make mention of the health care wild card. Think about how much health care costs and how much more you require as you age. I've read something recently that purports you really need close to 100% of your current income because your overall needs don't decrease, they shift.<BR/><BR/>I would guess the median salary of my friends and family is about 50K. If you sock away $1,000,000, you can probably live on the interest alone assuming the median risk free rate is ~5% over the course of your retirement. You can draw a little more in the lower rate stretches and replace a little during higher rate days. And of course, you can't take it with you, so why not take a little extra from the principal each after you've gotten a handle on the wildcards.<BR/><BR/>And all of this assumes no social security benefits. Because honestly, can you really rely on that absolutely being there? I wouldn't bank on it.<BR/><BR/>My two cents.Bill Bhttp://www.blogger.com/profile/09562787236440610706noreply@blogger.com